I have mineral rights to a paying well that has recently been transferred to a new operator in Harper County. We have been traveling and upon our return I reached out to the new operator of record to make contact and update our address, etc. They stated they were holding our royalties waiting for the signed Division Order.
I emailed them a W-9 and they responded back with “Will not release suspense funds until I receive Division Orders”.
I had always thought Oklahoma was a state where you don’t HAVE to have a signed Division Order to get paid.
Title is clear and never any issues. The well has been paying for years (small production) but no issues with previous operator, without a signed Division Order.
You do not have to sign a division order in OK. In fact, it is much better not to. Many Texas operators are under the assumption that they need a DO since they do require them in Texas. Some want a DO just because it is “company policy”. Send them a certified letter return receipt saying that you have been paid for years and years with no issues and demand your royalties and interest! Provide them with yet another copy of your W-9 and tell them that no DO is required in OK under the statutes. If your decimal interest was correct, then include that in your letter.
Thank You for confirming what I thought was the case. I will do just that.
I tried looking for the statutory and case law verbiage but wasn’t able to locate it. Can you point me in the right direction?
To my knowledge, it is NOT in the case law, but that is the point. (But I have not read every word of statute 52.) Some other states require a DO. The best webinar that I have seen on DOs in OK was done recently by two attorneys in OK through NARO (National Association of Royalty Owners). If you are a member, the webinar is free. If you are not, you can watch it for $25. They gave very specific legal reasons why you would not want to sign a DO in OK. I cannot remember if they quoted specific sections. I need to go back and watch it again.
The Hull case interprets 52 O.S.Supp.1985 § 540 in favor of a mineral owner who refused to sign a division order in Oklahoma. (Texas and some other states have different rules). Technically, all they can require is an address and a W9 form.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
The previous responders are correct; however, is there an issue with the proposed Division Order such that you find it unacceptable in form or accuracy? While you may have the correct legal standing, do you want to litigate the matter?
Most companies back down because they know that it is not required. They also don’t want to pay the royalty owner’s interest, court costs and attorney’s fees.
Most division orders ask the royalty owner to verify the accuracy. Few of us have the necessary information to do so. In addition, it is not a requirement that can be placed on an Oklahoma mineral owner.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
Let me give two possible alternatives, some of which might not apply to you or everybody.
You don’t sign the Division Order.
a) The company doesn’t send you a check.
b). You email the company saying one doesn’t have to sign a check. No check arrives.
c) You get mad. You then hire an attorney to write a threatening letter.
d) another month goes by and you don’t get a check.
e) You blood pressure rises and you spend more time trying to get paid.
Or
2) You sign the Division Order (even if you are probably not obligated to;.
a) You receive a check in the mail.
b) Instead of doing b) c) and e) above, you watch TV, read a book or play with your grandchildren.
I agree with Tim. If the decimal is correct on the DO, what’s the big deal in signing it? You can always dispute if your records show something different. I do it all the time with our interest. Seems like wasted time and effort just because you aren’t ‘obligated’ to sign it. Just my two cents. Not that it matters.